Execs Go With Their Guts Until Data Improves
When it comes to appreciating the value of big data and analytics, seeing is apparently believing.
That’s among the key findings of a recent data and analytics survey of 1,135 senior executives from industries ranging from energy to transportation released by market researcher PwC, better known as PricewaterhouseCoopers.
The data analytics survey sought to define the role played by data and analytics in what the survey dubbed “big decision making,” or “the most significant decisions about the strategic direction of the business.”
Among the “motivators” of so-called big decisions are unexpected market opportunities that are simply too good to pass up. Thirty percent of respondents identified this “opportunistic” motivation, prompting the study’s authors to conclude that big decisions have a “hot state” rather than a “planned” motivation.
By contrast, big decisions that fit a company’s overall corporate strategy came into play only 18 percent of the time, respondents said.
Which leads to the question of the role of data and analytics in the process of making big, or strategic, decisions. While 29 percent of respondents said data and analytics did factor into big decisions, a larger percentage (30 percent) said they relied more heavily on “intuition and experience.”
“One of the challenges is that organizations don’t really know they need big data and analytical skills until there’s a project where they see the benefits,” one executive noted.
Hence, one of the challenges for data analytics vendors is demonstrating the return on data analytics investments.
An earlier survey on the impact of big data by the Harvard Business Review found that corporate decision makers have major concerns about access to, availability of, and the quality of internal and outside data. One result has been reduced confidence in their decision-making ability, the Harvard study concluded.
Echoing those conclusions, the latest survey found that among the current barriers to adoption of data analytics are concerns about data quality and accuracy (35 percent of respondents), limited direct benefit along with difficulties in assessing which data is truly useful (both 30 percent) and lack of necessary data analytics skills (29 percent).
The lack of familiarity with data analytics echoes other studies that found much greater enthusiasm for data tools among IT administrators and analysts that in the executive suite.
One reason, the survey found, is that “executives feel the quality of data analysis has not improved. Nevertheless, many said data analysis “is a priority area for improvement over the next two years.” To that end, respondents emphasized the need to improve the quality of data analysis tools.
Decision makers continue to look for any useful analytics tools as market uncertainty grows. Concluded one respondent: “We need to increase the amount of data that we collect, we need to discover the potential value of that data, and we need to use it as a reference for big decisions.”
PwC said the survey was conducted during May 2014 with the help of The Economist Intelligence Unit. Thirty-five percent of the executives surveyed were based in North America, 28 percent in Europe and 24 percent from the Asian Pacific. However, most operate in more than one region, PwC noted.